Yesterday AAPL led the market down, closing down 2.5% on the day. As a result implied volatility in October options popped 10.7%. This move caused one trader to trade a spread known as an iron condor. An iron condor used when traders think a stock will remain sideways through expiration and thus want to short volatility. This trader sold the Oct. 660/710 strangle and hedged by buying the 650/720 strangle. This was put on 1,645 times. As long as AAPL, which closed at 673.54, is in the 660-710 range at October expiration this trade will make $0.38, and if AAPL is either below 650 or above 720 then this trade will lose $9.62.
Another large option trade yesterday was on XRT, the SPDR S&P Retail ETF. This ETF is 11% below the 52-week high it made two weeks ago, and one trader is making a bet that it will continue lower. Yesterday the Nov. 63/58 put spread was bought 24,650 times for $1.25. This is a bearish spread that makes money if XRT is below 61.75 at Nov. expiration. If XRT is below 58 at that time the spread will make its maximum profit of $3.75. This trade could be speculation that retail stocks lead the market lower, or could be a hedge against a portfolio of retail stocks.